More CPA Executives Are Optimistic about the US Economy
- View of the prospects for the US economy and their own organization in the next twelve months.
- Future hiring plans.
- Expectations for growth in spending on marketing and training as well as for other anticipated changes in business spending.
Although each of the nine components of the CPA Outlook Index (CPAOI) rose slightly in the first quarter, the fastest-rising element of the index was optimism about the US economy, which jumped from 40 points to 61. It had fallen to as low as 25 points in the third quarter of 2011.
- Expectations for revenue and profit increases improved for the second consecutive quarter.
- Staffing expectations also improved slightly but remain low, with an increase of only 1.5 percent. The technology sector is expected to add the most jobs over the next twelve months. Health care providers, such as hospitals and nursing homes, are projected to add the least.
- Expectations for pricing and cost increases remain stable. Respondents continue to expect the prices they pay to increase more than what they charge, but the gap closed this quarter to .7 percent, the smallest amount since second quarter 2009.
- Expectations for increases in salary and benefits costs remained stable.
- Expectations for health care costs increased slightly, from 6.0 percent to 6.2 percent.
- Spending plans are generally stable.
- Domestic economic conditions
- Regulatory requirements/changes
- Employee and benefits costs
- Domestic competition (moved from fifth to fourth)
- Domestic political leadership (moved from sixth to fifth)
- Stagnant markets/declining markets (moved to fourth to sixth)
In the first quarter CPA executive survey within a survey of fiscal and monetary policy:
- Seventy percent said the federal government should not initiate another round of quantitative easing, 11 percent support another round of quantitative easing, and 18 percent are unsure.
- Sixty-four percent said an extension of "Bush era" tax cuts would increase their optimism, 18 percent said it would decrease it, and 18 percent said it would do neither.
- Forty-three percent felt that the repeal of the sequestration cuts would decrease optimism, 21 percent felt it would increase their optimism, and 36 percent said it would do neither.
- Eighty-nine percent said there was less than a 25 percent chance that any meaningful economic policy action would come out of Washington this year.
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